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Dealing with rejection: options for applicants not selected in the FY2016 H-1B lottery

The U.S. Citizenship and Immigration Services (USCIS)’s announcement last month that it received nearly 233,000 H-1B petitions for fiscal year 2016 beginning October 1, 2015—a record total, and a 35% increase over last year—to fill its quota of 85,000 means that nearly two-thirds of all cap-subject H-1B petitions were rejected. Applicants without an advanced degree had a roughly 30% chance of being selected in the lottery. The USCIS is returning unselected petitions along with their filing fees to petitioners. This tragic situation has put many employers and their foreign national employees in a bind, with current visa statuses and work authorizations expirations looming. With the prospects of immigration reform slim in the current Congress, employers should assess alternative short-term options to retain key employees and to, at least, preserve their ability to reenter those employees in next year’s H-1B lottery. While these options can be slim, particularly for advanced degree holders who have exhausted post-degree training options, employers and foreign national employees are not completely out of luck, as we have alluded to in recent alerts. Employers and employees should consider traditional alternatives to the H-1B visa, new opportunities for work authorization as a result of executive action, and other creative short-term solutions within the boundaries of the immigration laws.

H-1B Alternatives for Exploration

Continuing F-1 Status: Employers and F-1 students who have only a bachelor’s degree (the least successful group in this year’s lottery) should consider whether the F-1 student can return to school and register for a master’s degree program. Aside from the benefits of additional skills and knowledge, a higher degree program could allow the employee to take advantage of the F-1 visa’s Curricular Practical Training (“CPT”) and Optional Practice Training (“OPT”) opportunities that permit at least some continued employment. Students seeking immediate employment during their first year in a higher degree program should exercise caution though, as the Student Exchange Visitor Program (“SEVP”) does restrict the ability of a student to immediately be work authorized through the CPT program. Additionally, full-time CPT employment will count against a student’s allocation of OPT and thereby reduce the duration of a student’s post-completion OPT. Any decisions to request CPT or other employment while in school should be made in close consultation with an institution’s International Students Office and Designated School Official (“DSO”).

Under current law, the Bachelor’s degree holders who complete a U.S. master’s degree will get two opportunities in the FY2017 cap-subject H-1B lottery—one under the advanced degree exemption cap and another in the general category cap, increasing the likelihood of selection in a future H-1B lottery. Although it is a significant commitment, master’s degree holders could also enroll in a PhD program. The exception to the availability of curriculum-related work authorization is for foreign national employees seeking a second degree at the same level (a second master’s Degree, for example); while they can maintain their F-1 status and remain in the country, they would not receive new training periods that would permit continued employment and they would generally not be work authorized through the student program alone.

As we further describe below, enrolling in a Science Technology Engineering or Math (STEM) field for a higher degree will allow the foreign national to obtain a regular 12-month OPT period and an additional 17-month OPT period.

OPT STEM Extension: F-1 students who have received a degree and exhausted their 12-month OPT status may be eligible for a one-time 17-month post-degree OPT extension. This extension is available to these employees only if they have an eligible Science, Technology, Engineering, or Math (STEM) degree and are currently employed in an approved post-completion OPT period related to that STEM degree. Importantly, an employer must be registered for E-Verify for their F-1 visa-holding employees to be eligible for the STEM extension, and the employee must apply before their current post-completion OPT period expires.

TN (Trade NAFTA) Visa: Canadian and Mexican nationals (or their spouses/parents) who hold eligible professional positions, continue to have ties to their home country, and do not intend to abandon their permanent residency abroad may be eligible for a TN visa. Unlike the H-1B category, the TN category does not recognize the concept of “dual intent,” or the intent to work temporarily while pursuing permanent residency, though this issue is not insurmountable.

Employment-Based Visas: F-1 students in OPT who have an employment authorization card (EAD) that will not expire for six to eight months or more can explore seeking permanent residency under one of the employment based visa categories if their home country is not subject to an over-subscribed quota (i.e., the EB category numbers are current). Depending on the expiration date of the EAD, F-1 students who can pursue this option may have a brief gap in employment authorization, even though they could remain in the United States during the gap.

Overseas Affiliates: If the employer has an affiliate, branch, parent, or subsidiary office overseas, foreign national employees who missed out in the lottery this year could consider working abroad for the affiliate for at least one year and then seeking an L-1 visa. This visa category is available to employees working in executive, managerial, or certain “specialized knowledge” positions only. New USCIS guidance on the meaning of “specialized knowledge” may make this category more attractive.

Extraordinary Ability: Foreign national employees who have “extraordinary ability” in the sciences, arts, education, or business as defined by USCIS regulations may qualify for an O visa for up to three years. More rarely, a foreign national who has “exceptional” ability or an advanced degree and can demonstrate that it is in the “national interest” that the PERM Labor Certification requirement be waived could file a concurrent I-140 petition and Adjustment of Status (AOS) application for permanent residency and get a work permit within 60 to 90 days while the application is pending. As with employment based visas, eligibility to file the I-140 and AOS concurrently are only available if the employee’s home country is not subject to an over-subscribed country quota.

Executive Actions: Although limited in scope, the recently-announced availability of work authorization to certain H-4 status holders whose spouses are the principal beneficiaries of an approved I-140 subject to the per-country limitations, or an extension of their H-1B status beyond the 6th year under Sections 106(a) or 106(c) of the American Competitiveness in the 21st Century Act of 2000, will also provide independent work authorization to some individual prospective employees.

Other country-specific and profession specific options: While these are the most common options, employers and employees may have other options depending on a number of factors, including employees’ personal situations and nationalities. For instance, nationals of Australia may qualify for the E-3 visa. The H-1B1 visa could be an option for nationals of Chile or Singapore. Certain essential employees who share the same nationality as their multinational or international employers could consider the E-2 visa. The H-3 or J-1 visas may be available to an individual entering a structured training program or who could be categorized as an exchange visitor. Individuals in short-term positions that can be classified as temporary can consider the H-2B program.

The involuntary termination of an employment relationship can be a human resources nightmare and a difficult situation for both the employer and employee, increasing the importance of exhausting all options. As this wide range of options demonstrates, alternatives to the H-1B lottery do exist and will require individualized, case-by-case consideration. Given the importance of maintaining status, it is critically important that employers and employees whose FY2016 H-1B petitions were not accepted for processing this year, or who have not received notifications about the status of their H-1B petitions yet, act quickly with immigration counsel to identify alternatives as soon as possible.

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